Quincy Bankruptcy Attorney-IRAs protected in bankruptcy?
May 12, 2010
By Kara O’Donnell, Bankruptcy Attorney
(857) 526-1355 Quincy, MA
In a bankruptcy filing, debtors have the right to claim a generous amount of property as exempt. (Exempt property is NOT allowed to be taken by the Trustee and sold to pay the creditors.)
While most debtors choose to use the Federal exemptions, debtors who have a large amount of equity in their home most often prefer to use the Massachusetts property exemptions instead. Consult with a bankruptcy attorney to determine which plan of action is right for you.
While there is a set dollar amount of property that can be exempted in Federal exemptions, there also exists ADDITIONAL exemptions to protect almost all of your retirement funds in bankruptcy. This is a very broad protection that applies to all types of plans including 401(k) plans and 403(b) plans. IRAs and Roth IRAs are protected but only up to the amount of $1,000,000. (There are some exceptions as to rollovers – consult with a qualified bankruptcy attorney.)
And as mutual funds are not retirement funds, they would be subject to the exemptions mentioned at the beginning of this post.
Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES (857)526-1355
Posted by Kara O’Donnell